The tactical demand planning process plays the important role of aligning the necessary operational decisions to serve customers, through the creation of sales forecasts and the concatenation of commercial plans with the available operational capacities. And why is this important? The need to project future demand is a common planning and control step, aiming to minimize inventory and stockouts. However, how to do this in a structured, accurate and aligned way with the company's strategy? The Sales and Operations Planning (S&OP) process, or with some variations the Integrated Business Planning (IBP), helps to properly allocate resources to maximize financial results and minimize forecasting errors and uncertainties, further reducing costs and improving performance. service level. This type of process, in general, needs to be carried out strategically, ensuring the existence of the following five steps:
Figure 1 – ILOS adapted from Wanke and Julianelli (2011)
The first step is the sales forecast. We forecast demand through the analysis of past sales, with the aim of projecting future behavior, through the intelligent use of data with mathematical extrapolation models, which can consist of a simple average to complex models with predictive algorithms, neural networks and learning machine. The latter are more difficult to implement, but allow some peculiar characteristics of the sales series to be incorporated into the model.
The second stage involves the construction of a unrestricted sales plan, where we took the demand projection from the previous stage and analyzed it together with the marketing and commercial team, enriching these numbers with the attribution of real market events, such as promotions, new product launches, entry of a competitor in the market and campaigns in social media.
The third step is independent of the previous steps, in it we do the operational plan, which considers the operation's capacity restrictions, analyzing production capacity, supplies, storage and transport in view of the unrestricted sales plan. At this stage, the critical points must be highlighted, as well as the limitations of each link in the chain.
The fourth phase is that of reconciliation of plans and financial analysis. In this phase, the unrestricted and operational sales plans are aligned. Here, the discussion of the conflicting points and alignment of the alternatives to be followed takes place. This alignment takes place in meetings with managers, analysts and the financial sector to validate the scenarios.
The fifth and final step is to ensure that the strategic vision will be reflected in agreed plans, validating the conciliation of plans, linked to the conflicts of local and global areas and objectives, thus resulting in an agreed demand plan.
Do you know how to apply these five steps in your company? Would you like to know more about how to build an efficient demand plan? The ILOS has the Collaborative Demand Planning Course! Participate and tell us how your planning is!
Sources:
ILOS:
Online Course ILOS – Demand Planning
https://ilos.com.br/web/vieses-da-racionalidade-no-planejamento-da-demanda/
https://ilos.com.br/web/problemas-de-julgamento-e-tomada-de-decisao-no-atendimento-da-demanda/
https://ilos.com.br/web/quais-sao-as-caracteristicas-de-um-planejamento-da-demanda-eficiente-analise-das-definicoes-fundamentais-e-estruturais-do-processo/
https://ilos.com.br/web/analise-do-processo-de-planejamento-da-demanda-e-sop-em-empresas-brasileiras-parte-2/
https://ilos.com.br/web/analise-do-processo-de-planejamento-da-demanda-e-sop-em-empresas-brasileiras-parte-1/
https://ilos.com.br/web/desafios-para-implementacao-de-iniciativas-de-colaboracao-no-processo-de-planejamento-da-demanda-parte-2/
WANKE, Peter; JULIANELLI, Leonardo. Sales forecast. Organizational Processes and Quantitative and Qualitative Methods. 2nd ed. Rio de Janeiro: Atlas, 2011.
